The Massachusetts Department of Public Utilities’ (“DPU”) recent emergency order (the “Order”) issued May 11 in its Docket 16-64 made some immediate changes to the Commonwealth’s net metering law enacted by the Act Relative to Solar Energy (the “Act), which, according to its own preamble, was itself was an “emergency law, necessary for the public convenience” adopted, in part, to ensure a “transition to a stable and equitable solar market.”

On the bright side, the Order immediately lifted the Commonwealth’s net metering caps, enabling a large volume of stalled projects to move forward.

Unfortunately, at the same time, whether intended or not, the Order has also raised the specter of an abrupt, disruptive and costly transition to rough-justice ‘net metering reform’ that will reduce by 40% the value of net metered energy produced by many so-called ‘private projects’ such as the many community shared solar projects and projects hosted by large health care, educational and other non-profit institutions which are currently being developed across the Commonwealth.

So, rather than enabling such projects to move forward, the Order and the emergency regulations that it adopted to amend 225 CMR 18.00 et seq. (the “Emergency Regulations”) raise the possibility that a number of projects that were already moving forward may be put to an untimely end.

Many had expected the Order to efficiently implement the Act’s ‘compromise’ legislation, viewed by policy makers as having ended the divisive legislative impasse on the future of net metering after more than a year of inaction, and to be coordinated with the Department of Energy Resource’s own recent emergency regulations modifying the Solar Carve-out to the Commonwealth’s RPS.

Instead, the Order and Emergency Regulations surprisingly propose defining the point after which a project would generate and its customer would receive the lower net metering credit rate based on whether a project has been “interconnected” by the date the DPU determines that the transition is to occur.

The Commonwealth’s ability to clearly define for the market exactly when that transition becomes effective will be essential to ensuring a “transition [that is] stable and equitable” and the prevention of yet another solar emergency.

As written, the Order and Emergency Regulations provide no clear insight into when DPU might declare that transition date. More concerning, as many commenters have observed in comments already filed in the Docket, the “interconnection” of distributed generation projects is a lengthy process, frequently delayed, and entirely within the control of utilities who are themselves scrambling to manage limited financial and labor resources on competing timelines.

Providing a predictable and manageable transition was the stated goal of the Act.
The deadline for providing initial comments to the DPU is June 15 and the DPU will hold a public hearing at 10:00 a.m. on the same day.

Commenters in the Docket have already requested immediate and clear guidance from the DPU. Whether such guidance is forthcoming or not, public comments from customers and developers of affected projects will be necessary for the DPU to manage a smooth transition and avoid an unnecessary disruption to the legitimate investment-backed expectations of participants at this critical time in this complicated and ever-changing market.

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Blog Editors

Kevin Conroy is a partner in Foley Hoag’s Administrative Law Department, with a primary focus on regulatory and government investigations. He co-chairs the firm’s Energy and Cleantech and State Attorney General groups...More

As Chair of Foley Hoag's Taxation Group, Nicola Lemay advises clients in all stages of their business development. She represents clients in the tax aspects of structuring and financing renewable energy projects... More